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Suppose that you have initial wealth equal to $25. You receive a letter that states that you have won $16 ina lottery. However, the next
Suppose that you have initial wealth equal to $25. You receive a letter that states that you have won $16 ina lottery. However, the next day you receive a call from the lottery organizers. They tell you that it was a mistake so that in fact you did not win anything. Suppose further that you got the lottery ticket for free and that you consider the impact of wealth changes on your utility sequentially. How did your utility change as a result of these events according to (A) Expected utility (B) Prospect utility
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